Probate
Encyclopedia
Probate is the legal process of administering the estate
Estate (law)
An estate is the net worth of a person at any point in time. It is the sum of a person's assets - legal rights, interests and entitlements to property of any kind - less all liabilities at that time. The issue is of special legal significance on a question of bankruptcy and death of the person...

 of a deceased person by resolving all claims and distributing the deceased person's property
Property
Property is any physical or intangible entity that is owned by a person or jointly by a group of people or a legal entity like a corporation...

 under the valid will. A probate court (surrogate court) decides the validity of a testator
Testator
A testator is a person who has written and executed a last will and testament that is in effect at the time of his/her death. It is any "person who makes a will."-Related terms:...

's will. A probate interprets the instructions of the deceased, decides the executor
Executor
An executor, in the broadest sense, is one who carries something out .-Overview:...

 as the personal representative
Personal representative
In common law jurisdictions, a personal representative is the generic term for an executor for the estate of a deceased person who left a will or the administrator of an intestate estate. In either case, a surrogate court of competent jurisdiction issues a finding of fact, including that a will...

 of the estate, and adjudicates the interests of heirs and other parties who may have claims against the estate.

Probate Administration

Probate is a process by which a will of a deceased person is proved to be valid, such that their property can in due course be retitled (US terminology) or transferred to beneficiaries of the will. As with any legal proceeding, there are technical aspects to probate administration:
  • Creditors need to be notified and legal notices published.
  • Executors of the Will need to be guided in how and when to distribute assets and how to take creditors' rights into account.
  • A Petition to appoint a personal representative may need to be filed and Letters of Administration obtained.
  • Homestead property, which follows its own set of unique rules in states like Florida, must be dealt with separately from other assets. In many common law jurisdictions such as Canada, parts of the US, the UK, Australia and India, jointly owned property will pass automatically to the surviving joint owner separately from any will, unless the equitable title is held as tenants in common.
  • There are time factors involved in filing and objecting to claims against the estate.
  • There may be a lawsuit pending over the decedent's death or there may have been pending suits that are now continuing. There may be separate procedures required in contentious probate cases.
  • Real estate
    Real estate
    In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...

     or other property may need to be sold to effect correct distribution of assets pursuant to the will or merely to pay debts.
  • Estate taxes, gift taxes or inheritance taxes must be considered if the estate exceeds certain thresholds.
  • Costs of the administration including ordinary taxation such as income tax on interest and property taxation will be deducted from assets in the estate before distribution by the executors of the will.
  • Other assets may simply need to be transferred from the deceased to his or her beneficiaries.

Etymology

The etymology
Etymology
Etymology is the study of the history of words, their origins, and how their form and meaning have changed over time.For languages with a long written history, etymologists make use of texts in these languages and texts about the languages to gather knowledge about how words were used during...

 of "probate" stems from Latin, old French, and old English words with somewhat different meanings. The earliest definition, dated to 1463, means the "official proving of a will," and originates from the Classical Latin
Classical Latin
Classical Latin in simplest terms is the socio-linguistic register of the Latin language regarded by the enfranchised and empowered populations of the late Roman republic and the Roman empire as good Latin. Most writers during this time made use of it...

 word probatus, meaning "proven" or "a thing
Adjectival noun (noun)
An adjectival noun refers to an adjective that functions as a noun. English examples include "the other", "the True", "the Irish", and "the rich and the poor".- Related concepts :...

 proven." This is the past participle of probāre, which means "to try, test, prove" or "prove to be worthy". It also traces its roots to the old French word prouwe, dated circa 1175, or prover, and is related to the English word "prove", and the Welsh word "profi" (to test). The term "probative," used in the law of evidence
Evidence
Evidence in its broadest sense includes everything that is used to determine or demonstrate the truth of an assertion. Giving or procuring evidence is the process of using those things that are either presumed to be true, or were themselves proven via evidence, to demonstrate an assertion's truth...

, comes from the same Latin root but has a different English usage.

Commonwealth

In England and Wales
England and Wales
England and Wales is a jurisdiction within the United Kingdom. It consists of England and Wales, two of the four countries of the United Kingdom...

, Northern Ireland
Northern Ireland
Northern Ireland is one of the four countries of the United Kingdom. Situated in the north-east of the island of Ireland, it shares a border with the Republic of Ireland to the south and west...

, Commonwealth
Commonwealth
Commonwealth is a traditional English term for a political community founded for the common good. Historically, it has sometimes been synonymous with "republic."More recently it has been used for fraternal associations of some sovereign nations...

 countries (common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...

 jurisdictions), Ireland
Ireland
Ireland is an island to the northwest of continental Europe. It is the third-largest island in Europe and the twentieth-largest island on Earth...

 and in the U.S., probate ("official proving of a will") is obtained by executors of a will while Letters of Administration
Letters of Administration
Letters of Administration are granted by a Surrogate Court or probate registry to appoint appropriate people to deal with a deceased person's estate where property will pass under Intestacy Rules or where there are no executors living having been validly appointed under the deceased's will...

 are granted where there are no executors.

United States

In any jurisdictions in the U.S. that recognizes a married couple's property as tenancy by the entireties, if a person dies intestate
Intestacy
Intestacy is the condition of the estate of a person who dies owning property greater than the sum of their enforceable debts and funeral expenses without having made a valid will or other binding declaration; alternatively where such a will or declaration has been made, but only applies to part of...

 (owning property without a will), the portion of his/her estate so titled passes to a surviving spouse without a probate.

If the estate is not automatically devised to the surviving spouse in this manner or through a joint tenancy, and is not held within a trust, it is necessary to "probate the estate", whether or not the decedent had a valid will
Will (law)
A will or testament is a legal declaration by which a person, the testator, names one or more persons to manage his/her estate and provides for the transfer of his/her property at death...

. A court having jurisdiction of the decedent's estate (a probate court) supervises probate, to administer the disposition of the decedent's property according to the law of the jurisdiction and the decedent's intent as manifested in his testamentary instrument. In order to dispose of certain assets in the estate, it is necessary to sell the illiquid assets including real estate. There are exceptions for smaller estates.
If the decedent died without a will, known as intestacy
Intestacy
Intestacy is the condition of the estate of a person who dies owning property greater than the sum of their enforceable debts and funeral expenses without having made a valid will or other binding declaration; alternatively where such a will or declaration has been made, but only applies to part of...

, the estate will be distributed according to the laws of the state where the decedent resided or held by the court.
If the decedent died with a will, the will usually names an executor
Executor
An executor, in the broadest sense, is one who carries something out .-Overview:...

 (personal representative), a person tasked with carrying out the instructions laid out in the will. The executor marshals the decedent's assets. If there is no will, or if the will does not name an executor, the probate court can appoint one. Traditionally, the representative of an intestate estate is called an administrator. If the decedent died with a will, but only a copy of the will can be located, many states will allow the copy to be probated, subject to the rebuttable presumption that the testator destroyed the will before death.

In some cases, where the person named as executor cannot administer the probate, or wishes to have someone else do so, another person will be named as administrator. An executor or an administrator may receive compensation for his service.

The probate court may require that the executor provide a fidelity bond
Fidelity bond
A fidelity bond is a form of insurance protection that covers policyholders for losses that they incur as a result of fraudulent acts by specified individuals. It usually insures a business for losses caused by the dishonest acts of its employees....

, an insurance policy in favor of the estate to protect against possible abuse by the executor.

The representative of a testate estate who is someone other than the executor named in the will is an administrator with the will annexed, or administrator c.t.a.
CTA
CTA may refer to:*Brazilian General Command for Aerospace Technology, abbreviated CTA*California Teachers Association, a labor union*Call to Action...

 (from the Latin cum testamento annexo.) The generic term for executors or administrators is personal representative
Personal representative
In common law jurisdictions, a personal representative is the generic term for an executor for the estate of a deceased person who left a will or the administrator of an intestate estate. In either case, a surrogate court of competent jurisdiction issues a finding of fact, including that a will...

.

Steps of probate

Some of the decedent's property may never enter probate because it passes to another person contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...

ually, such as the death proceeds of an insurance policy insuring the decedent or bank or retirement account that names a beneficiary or is owned as "payable on death", and property (sometimes a bank or brokerage account) legally held as "jointly owned with right of survivorship".

Property held in a revocable or irrevocable trust created during the grantor's lifetime also avoids probate. In these cases in the U.S. no court action is involved and the property is distributed privately, subject to estate taxes.

After opening the probate case with the court, the personal representative inventories and collects the decedent's property. Next, he pays any debts and taxes, including estate tax in the United States
Estate tax in the United States
The estate tax in the United States is a tax imposed on the transfer of the "taxable estate" of a deceased person, whether such property is transferred via a will, according to the state laws of intestacy or otherwise made as an incident of the death of the owner, such as a transfer of property...

, if the estate is taxable at the federal or state level, or the Pennsylvania inheritance tax. Finally, he distributes the remaining property to the beneficiaries, either as instructed in the will, or under the intestacy
Intestacy
Intestacy is the condition of the estate of a person who dies owning property greater than the sum of their enforceable debts and funeral expenses without having made a valid will or other binding declaration; alternatively where such a will or declaration has been made, but only applies to part of...

 laws of the state.

A party may challenge any aspect of the probate administration, such as a direct challenge to the validity of the will, known as a will contest
Will contest
A will contest, in the law of property, is a formal objection raised against the validity of a will, based on the contention that the will does not reflect the actual intent of the testator...

, a challenge to the status of the person serving as personal representative, a challenge as to the identity of the heirs, and a challenge to whether the personal representative is properly administering the estate. Issues of paternity
Paternity (law)
In law, paternity is the legal acknowledgment of the parental relationship between a man and a child usually based on several factors.At common law, a child born to the wife during a marriage is the husband's child under the "presumption of legitimacy", and the husband is assigned complete rights,...

 can be disputed among the potential heirs in intestate estates, especially with the advent of inexpensive DNA profiling techniques. In some situations, however, even biological heirs can be denied their inheritance rights, while non-biological heirs can be granted inheritance rights.

The personal representative must understand and abide by the fiduciary duties, such as a duty to keep money in interest bearing account and to treat all beneficiaries equally. Not complying with the fiduciary duties may allow interested persons to petition for the removal of the personal representative and hold the personal representative liable for any harm to the estate.

Avoiding probate

Probate generally lasts several months, and often over a year before all the property is distributed, and can incur substantial court and attorney costs in large estates. One of the many ways used in the US to avoid probate is to execute a living trust. Alternatively property can be passed outside probate by setting up P.O.D (paid on death) designations on bank accounts and T.O.D (transfer on death) on brokerage accounts, 401ks and IRAs that pass automatically to designated beneficiaries, or placing property in joint tenancies with the right of survivorship. As for real estate, a testator may add a named beneficiary to a deed by executing a life estate deed. The property can be passed several generations. The cost of such measures to avoid probate should be weighed against probate court fees, as the administration of a living trust or other arrangement will also incur legal and administrative charges, and as with all trusts is ultimately subject to the supervision of the court.

Avoiding probate does not eliminate estate taxes. Under the federal estate tax law as modified, property held in a living trust, life insurance, payable on death or transfer on death financial instruments, and other property a party receives upon decease of the decedent is included in the definition of a taxable estate.

England and Wales

When someone dies, the term "Probate" usually refers to the legal process whereby the deceased's assets are collected together and, following various legal and fiscal steps and processes, eventually distributed to the beneficiaries of the estate. Technically the term "Probate" has a particular legal meaning but it is generally used within the English legal profession as a term to cover all procedures concerned with the administration of a deceased person's estate. As a legal discipline the subject is vast and it is only possible in an article such as this to cover the most common situations, but even that only scratches the surface.

All legal procedures concerned with Probate (as defined above) come within the jurisdiction of the Family Division of the High Court of Justice by virtue of Section 25 of the Senior Courts Act 1981
Senior Courts Act 1981
The Senior Courts Act 1981, originally named the Supreme Court Act 1981 , is an Act of the Parliament of the United Kingdom. The Act defined in statute the structure of the Supreme Court of England and Wales, now known as the Senior Courts of England and Wales, consisting of the Court of Appeal,...

. The High Court is therefore the only body that is able to issue the documents which give persons the ability to actually deal with a deceased person's estate, such as to enable them to close bank accounts or sell property or shares. It is the production and issuing of these documents, known collectively as "Grants of Representation" that is the primary function of the Probate Registries, which are part of the High Court, to which the general public and probate professionals alike apply to for the Grants of Representation.

There are many different types of Grants of Representation, each one designed to cover a particular circumstance. The most common ones are those which cover the two most common situations - either the deceased died leaving a valid Will or they did not. If someone left a valid Will then it is more than likely that the Grant will be a "Grant of Probate". If there was no Will then the Grant required is likely to be a "Grant of Administration". There are many other Grants which can be required in certain circumstances and many have technical Latin names but the general public is most likely to encounter these two - the Grant of Probate and the Grant of Administration. If an estate has a value of less than £5,000.00 or if all assets are held jointly and therefore pass by survivorship, for example to a surviving spouse, a Grant will not usually be required.

The general public can apply to a local probate registry for a Grant themselves but most people use a probate practitioner such as a solicitor. If an estate is small some banks and building societies will allow accounts to be closed by the deceased's immediate family without a Grant, but there usually needs to be less than about £15,000 in the account for them to allow this.

The persons who are actually given the job of dealing with the deceased's assets are called "personal representatives" or "PR's". If the deceased left a valid Will then the PR's will be the "Executors" who are appointed by the Will - "I appoint X and Y to be my Executors etc." If there is no Will or if the Will does not contain a valid appointment of Executors (for example if they are all dead) then the PR's are called "Administrators". So, Executors obtain a Grant of Probate which enables them to deal with the estate and Administrators obtain a Grant of Administration which enables them to do the same. Apart from that distinction the function of Executors and Administrators is exactly the same.

For an explanation of the intestacy probate process in England and Wales, see Administration of an estate on death
Administration of an estate on death
In English law, Administration of an estate on death arises if the deceased is legally intestate. In United States law, the term Estate Administration is used....

.

External links

The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
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